Business divided on BHP climate call

A call from the world’s biggest miner, BHP Billiton, for Australia to take a lead role on climate change has divided the business community and increased pressure on the government to act sooner on tackling carbon pollution.

As part of its deal with the Greens, the federal government has promised to set up a multi-party committee to examine ways of introducing a carbon price.

Its green push has gained a boost from BHP Billiton chief executive Marius Kloppers, who said a carbon tax was inevitable and Australia should play a lead role globally.

“Australia will need to look beyond coal towards the full spectrum of available energy solutions,” he told the Australian British Chamber of Commerce in Sydney on Wednesday night.

“Failure to do so will, down the road, place us at a competitive disadvantage when carbon is priced globally.”

Prime Minister Julia Gillard cautiously welcomed the call, but warned her government would wait until the committee delivered its findings before taking action on a carbon price.

During the election campaign, Ms Gillard vowed there would be no carbon tax introduced if Labor won the election.

“I welcome the statements today from Mr Kloppers,” Ms Gillard said. “The government has consistently said that we want to work towards a price on carbon.”

While BHP Billiton has reversed its previous aversion to a carbon price, the rest of the business community wasn’t so enthusiastic.

The National Farmers’ Federation said a carbon price would actually disadvantage Australia’s international competitiveness.

“Unlike BHP, we can’t pass those costs on,” said chief executive Ben Fargher. “It’s not that we oppose a price on carbon, but at the moment we can’t pass the costs on, we can’t get access to offsets.”

The Australian Chamber of Commerce and Industry, which represents 350,000 businesses, said its members were uneasy about the plausibility of energy prices tripling within a decade.

“They believe action should be aimed at energy efficiency rather than imposing extra taxes ... and certainly not before the rest of the world,” said the ACCI’s director of economic policy Greg Evans.

In an unusual day in politics, the Greens and the Construction, Forestry Mining and Energy Union were BHP Billiton’s strongest backers.

The mining union said Mr Kloppers’ call for Australia to pioneer a carbon price made it untenable for other businesses to oppose a carbon price.

The Greens said his comments would give impetus to the climate committee. The party’s deputy leader Christine Milne says she wants it to include MPs from both sides of politics who believe in a carbon price.

“We are in a different period of government. No one has all the power, no one has a total mandate for their positions,” she said.

Senator Milne indicated she would also ask Climate Change Minister Greg Combet to include former Liberal leader Malcolm Turnbull on the panel.

Such a move would potentially put pressure on Opposition Leader Tony Abbott, who won the Liberal leadership in December by opposing any carbon price.

Prominent economist Ross Garnaut, who wrote a climate report for the Rudd government in 2008, said an emissions trading scheme (ETS) with fixed-price permits would effectively act as a carbon tax.

“The price won’t be fluctuating with the vagaries of short-term politics in the period before you’ve got some stability coming from a deep international market,” Professor Garnaut said.